Thursday, September 6, 2007
Commercial real estate is a wonderful, exciting business that can offer a wealth of opportunity for those who look for it! Many people are often hesitant to enter such a market as commercial real estate for many different reasons. In fact, there are some major misconceptions about commercial real estate which I am going to address here.
Many people who hear about commercial real estate, but aren't necessarily in the business, often use the expression "Location, location, location!" Many people associate this expression as the truth, that the three most important attributes about a property are "Location, location, location!"
I am here to tell you- this is absolutely not the case! Now, I am not going to say location is not important, but what if you have a beautiful location for a mountain resort, complete with snowy hills, a perfect location for a lodge, and beautiful mountain views? What you want to do to the property is improve it for a weekend getaway for romantic couples with a beautiful lodge, resort, luxury type housing, and perhaps some individual cottages overlooking the green forest. Sounds great, right?
The perfect location- you can't beat it! But, you learn that the zoning for this property is residential, R1, to be exact. The use is only one single family residence per acre, and no commercial property allowed. What happened to your "Location, location, location?" It flew out the window!
The most important aspect of a property is the use. What is it intended for by designation of the city or county? It does not matter where the property is, if you cannot get the zoning that is in the realm of your intended use.
It is possible to get properties rezoned, especially as cities change and grow. Be sure to consult with the city or county to determine if these changes are even possible, because you do not want to buy a property that you cannot rezone, and be left with an unprofitable property on your hands.
Most people believe that commercial real estate is complicated and you need a special education or know how to succeed in the business. Many think that commercial real estate is filled with international finance, heavy and complicated math, complicated tax rules, and forms and applications that are just too complicated to understand correctly.
I am happy to tell you this misconception is the worst, because it puts a road block in front of many people's aspirations to become a commercial real estate insider. Let me put this misconception to rest. There is math involved, and most of it is not at all complicated: simple ratios, adding, subtracting and multiplying. What is even better is you don't have to do the math. There are others who can do that for you. The same is true with property management, inspecting the property, and doing the year-end tax report. In fact, commercial real estate is less complicated than residential real estate because you can focus your energies on a single deal that will be worth perhaps 10, 20, even 50 residential deals and more!
Let me put it into perspective for you. If you owned a business (many of you may), would you create strategies, keep the books, manage the many locations, sell on the front floor, and take out the trash after the day was over? I think not! Commercial real estate is made up of many people whom are there to help you with whatever you need. You must position yourself as a real estate insider, which is a leader in the business.
Another misconception is commercial real estate is management intensive, that you must manage every property you own. Let me tell you when you end up owning 10 or more properties, this is almost impossible to do! You do not have to actually manage your properties yourself, so you can concentrate on creating more deals. Hire a company or set a team in place to take care of this "day-to-day" business.
As you can see, what is passed around in dialogue about commercial real estate is not always true. Before you take everything to heart, be sure to get your facts straight. In fact, many people in this profession speak about commercial real estate as a business in which only the savvy and sophisticated can succeed. They often act this way because they want to keep people out of the market by differentiating themselves. If you were in this position, you would too!
About The Author:
Tony Seruga, Yolanda Seruga and Yolanda Bishop of http://www.maverickrei.com specialize in commercial and investment real estate. As of May, 2006, they and their partners are managing over $600 million dollars worth of new projects.
Don't Let Gas Prices Keep You From Getting Ahead
You want to get your real estate license, but with rising gas prices you don't want to travel back and forth to school everyday. What do you do? You can get your real estate license online by enrolling in a distance education course.
High gas prices are affecting everyone around the nation. When it costs the majority of Americans more than $50 to fill up their cars (MSNBC online survey), they are going to opt for cheaper alternatives. With telecommuting, home-based businesses and home schooling, there are many opportunities to conduct daily activities from home. Why not get an education from home?
Distance education enables you to pursue your real estate education without having to drive to a different location. You can attend an online real estate school from home. With online or traditional home study courses, you can advance your career through the use of your computer or textbooks, CDs, study guides, and more. Get ahead while you save money!
According to MSNBC, many people have changed their driving habits to cut down on gas costs, oftentimes staying home instead of using their car. With today's educational alternatives, you can do it all from home. Don't make your real estate education an exception.
Get your real estate license today by enrolling in an online real estate course. You can advance your career without cutting into your wallet.
http://www.realestatelicense.com
Your Financial Horoscope - Where will you be at age 65?
95% of people at age 65 are either dead, dead broke, or on a pension etc. How did they achieve this? Probably by doing what most people do, which is to get a good education, work hard, save money, buy lottery tickets and hope for the best.
4% of people are financially independent at age 65. What this means is that they can stop working and continue to live a comfortable lifestyle. They are definitely not rich, it just means that they have enough money to support themselves, usually around
$45 000 per annum.
1% of the population at age 65 will become what we call "rich". The Bureau of Statistics defines rich as those individuals with a net worth in excess of $1 million. In the year 2006 it is unlikely that $1 million dollars will make someone hands down rich. In fact many houses cost over $1 million.
Therefore, less than 1 in 100 people at 65 can be classified as truly rich. Living in one of the wealthiest countries in the world you may ask how this is so? The answer is simple, having a great job and buying lottery tickets is a sure way to end up in the 95% of the population doing exactly the same thing as you "dead/broke".
The solution is also simple. You must do something, anything, like that of the wealthiest 1% of people. There are not really any secrets here either as you probably already know some of the ways these people have created wealth; business/s, shares, options, inheritance, commodities and property.
Property though is the true standout. More people have become rich from property than by any other method. In fact, 95% of millionaires have used property to create serious wealth. Most future millionaires start out with very little and build a large, quality property portfolio over time.
But just buying a couple of houses and hoping for the best might not work either. If we break it down further it is where you buy, the type of property, and what you do with it that really makes the difference. More specifically, the greatest success and profits come from subdivision and property development. Just ask any millionaire developer! Fortunately for the average investor it very possible to begin with small projects such as renovations and two lot subdivisions. Your knowledge and experience will grow over time such that you can take on more complex development if you so wish.
So which financial category do you want to end up in? If you want to be in the 1% I strongly recommend you read more about my ebook, "Real Estate Subdivision and Property Development" at www.storesonline.com/site/711577/page/632469
Of course you can ignore my advice, but if you really want to, I know that you can succeed as I and many others on an average wage have done.
Steve Hambly
Investor/Developer/Author
Real Estate Subdivision and Property Development 2006
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